Want to retire early? Make a plan…and keep it!(Part 2)

The following is part 2 of a guest post from Precious of Frugal Makes Cents. To see part 1 of this mini-series, click here.

9. We purchased furniture, appliances and replacement appliances, and any other household expenses such as painting and roofing when we could pay cash for it. We have always funded accounts monthly for these purchases.

10. We started out buying our automobiles with car payments but always paid them off in a couple of years. Then, we started paying cash for them after we got that fund saved. I know lots of people believe that buying used cars is the way to go; it may be. However we always purchased our automobiles new. We keep them for 7- 10 years or more so feel we get our monies worth out of them. We negotiate the best price we can and then ask the salesman what his CASH price is. After the usual back and forth with his manager, he gives us the bottom line. UH HUH! 🙂 We hem and we haw and we have walked a few times, but because we are paying cash they usually don’t let us get out the door without dropping the price again. After all, they don’t have all that finance paperwork when you pay cash. Plus, we do our research well before we go shopping, so we know what the dealer paid for the car. This has worked very well for us over the years. Another thing that we look at before we purchase a car is how much is the insurance for that particular car going to cost. Insurance costs are phenomenal over the life of a car and should always be taken into consideration on a purchase.

11. One of the most important things that we did over our working years was: DO IT YOURSELF! We have saved many thousands of dollars doing our own work. DH learned when he was in college and owned his first automobile how to change his own own oil, windshield wipers, air filters, brakes, etc. Then he started buying the service manuals for our automobiles so that he could do a myriad of other repairs. No one taught him; he learned on his own. If the repair was under warranty, it went to the garage; if not, he fixed it.He also did all of our house maintenance, whether it be painting, building patios,landscaping, lawn mowing, plumbing, electrical wiring, fixing appliances, etc. He did it all teaching himself. He even built and stained two large bookcases that we used for 25 years in our family room. If there was any kind of a problem repair that came up, he would learn and fix it for us. When he first started doing this, there was no internet, so the library was the place to learn. Now you can Google just about anything and find the fix for it. If DH couldn’t get to the landscaping or lawn mowing because of college or an out of town work trip, I did it. I have also changed the oil in a car and changed a fuel filter in my old Toyota.What I am getting at here is anyone can learn to do almost anything! We had friends for years who all did their own work and we had friends who hired people to do everything. Our friends who hired everything out used to brag about it and say to us, ” I don’t have to do my own work!” I would just smile to myself and think – you don’t have any savings in the bank either. Which friends do you think are retired early and flush with money for the next 30-40 years?

12. Another important point I want to make is that we didn’t buy things because we felt we deserved them. I have heard so many people say for example: I work hard so I deserved to go on that expensive vacation. Or I work everyday, so I deserve a new car every 2 years. Statements like these make me cringe! I have had so many friends over the years who have gotten themselves into car loans or credit card debt because they felt they deserved things. Because of that attitude, they have racked up thousands of dollars worth of debt that they pay off by taking a home equity loan and then they charge those credit cards right back up to the credit limit. So they end up with double the debt! My favorite were friends who went out to dinner many times a week using a credit card because they were tired from working all week and they deserved it. NO ONE DESERVES ANYTHING that they can’t pay cash for at the moment they buy it. If you have the cash, by all means go on that vacation, buy that new dress or go out for a nice dinner, but if you are continually purchasing things that you feel you deserve on credit cards, you will never get ahead and be able to retire early. Remember when you retire, you want to be DEBT FREE! So pay those credit cards every month when the bill is due. Besides having a lot of money to live off of, paying off those cards is the most important thing.

13. We have always made sure that we have enough Homeowners and Automobile Insurance. We also carried Disability Insurance on DH when he worked. It would have paid us his salary if he was out of work for more than 90 days. It wasn’t that expensive. Fortunately we never had to use it and canceled the policy when DH retired. We had a lot of life insurance on DH and myself for years. DH wanted to make sure that we would be set if anything happened to him. We insured me as mom to replace all the things that I did that would be very expensive if I died. Nannies for the boys, cleaning services, etc. come to mind. Today DH and I carry minimal insurance since we don’t have the expenses of the children anymore, are debt free and are financially independent.One of the most important insurances was medical insurance. It is imperative today to have medical insurance. We were fortunate to have insurance through DH’s employer so the monthly premiums were lower than they would have been buying it on our own. But with co-pays and things that are not covered, you also have to budget monthly for these expenses that may come up. Now that we are retired, we still have insurance through DH’s last employer. We pay the monthly premiums. The premiums have risen 325% since we retired as I am sure a lot of peoples have. Our co-pays for Doctors, hospitals, and lab work have risen 80% and we have co-pays up to $60 per prescription. If DH dies before me, I no longer will have medical insurance. So I will purchase a catastrophic policy. When I reach the age of 65 which is quite a ways away, medicare will cover 80% of the bills, but I am not even counting on that because Medicare could be insolvent. If we had not saved a lot of money, these bills would wipe out our retirement, so make sure that you budget for your medical in your retirement plan. We also pay all dental and eyeglass expenses out of pocket since we have no insurance for them.

14. Other monthly expenses like food, utilities, cable TV, internet, etc. I think we all know how to save on. Be as diligent with these monthly expenses as you are with the big ones. Things that you buy over and over again add up to a really large expense in a years time. Just always strive to pay as little as possible for all of them.

These are all the things that we have done over our 42 years of marriage to make sure that we could retire early and so that we can live a long and happy retirement and not have to worry about where our next dollar is going to come from.

We nor any of you young people can count on Social Security when you reach retirement age. I believe it will be long gone for you and will be income based in just a couple of years. I believe that people who are close to retirement age who are below the median income level will receive it and those who are above will not. I believe you young people will never see a dime. I am hoping that the government will let you and my children stop paying Social Security and instead you will be able to put that money in your own retirement account. I believe that you will take better care of it than they have!

I hope you have realized by reading this that the main point is that NO ONE will take care of you in retirement but YOU. You can not rely on pensions, Medicare or Social Security to pay your way. They most likely will not be there for you.

I was a stay at home Mom for most of our working years and just worked a few years to help pay all of the college costs (tuition, room and board, books, transportation costs and all the myriad of fees and other things that make up the college bill) for our sons. If we could do it, anyone can do it! Even if you are sitting there saying I haven’t started yet and I am getting older, it is NEVER too late to start. By starting now to save for retirement, you will be so much farther ahead when you get there than you are today! If you have mortgage debt, credit card debt, automobile loans, etc., make a plan on paper to pay them off and get started! Then you will have the wonderful retirement that I believe everyone can have if they work very hard at attaining it.

Thank you, Precious, for sharing this valuable information with us! If you have any questions about the information posted in this part of the mini-series, leave a comment below or run over to Precious’s blog. Take a peek at Frugal Make Cents for more information on retirement, savings, and how to get more bang for your buck everyday.